Side note, how do you calculate cores for Server 2016 on a Scale system. Is it per node?

because I specifically spec'd that Xbyte system with 2x 8core procs because of Windows licensing

It's the same as anything else. It's per node that you allow Windows to run on. So in a three node system you can choose Windows to run on or be allowed to run on any one, two or three nodes (or more if you bought more.) Windows licensing is "up to" sixteen cores per node in the minimum licensing. So unless you are exceeding that, it's just the base licensing.

In a situation like this, without knowing the load numbers, it would be easy with a three node system to use one node for Windows and one for Linux and then have a third as the failover target. That would allow Windows to only need to be licensed for one node and SA to allow the failover (mobility) to the DR node. If you went with full Windows licensing on both or all three nodes you could do real time load balancing, of course, but that is likely excessive. The Windows licensing being such a large cost component.

We are looking to virtualize the servers in the data center in our office. Since most of our applications run in two co-lo data centers, managed by a service provider, the data center in our office could almost be considered a remote office.
Currently we have mostly physical Windows servers (yes, I know it is 2017) in this data center consisting of:
Two file servers for a total of 7 TB
Security system server
HVAC system server
Warehouse conveyor control server
We need to add about 6 Linux servers for SIP and a telecom specific application.

Ideally, we can move VMs to another host if one fails, but it doesn’t have to be instantaneous.
Current storage need is ~8 TB with room to grow to ~15 TB in the next 3-4 years. DAS, NAS, etc., whatever might work best for this situation.
Dell suggested a 3-2-1 architecture for over $100,000, which does not seem at all practical.
Another vendor suggested Dell’s VTRX with 3 M630 blades plus the storage.> We have started looking at HCI solutions, including Scale. StarWind and HPE SimpliVity as we do not the expertise in managing a hypervisor nor the time to manage it. Too many other projects and distractions.

We will need some sort of DR solution. We will want an on-site backup and a copy going off-site to Azure, AWS or similar.
Suggestions?

I can't say much about Scale, but both StarWind and SimpliVity (now proud part of HPE) have extensive pro active support facilities as part of their HCI offerings. It means it's going to be StarWind (and HPE of course) staff who'll "babysit" your IT infrastructure, watch critical telemetry and performance metrics and react BEFORE issue is going to happen. + dedicated support engineer doing all "grunt" work for you.

We have started looking at HCI solutions, including Scale. StarWind and HPE SimpliVity as we do not the expertise in managing a hypervisor nor the time to manage it.

That's the appropriate short list. Of those, @Scale is the one that is going to offload the most from your plate. Starwind provides HC but you are still managing the hypervisor on your own, separately. It's architecturally all together, but the management console is not.

We have started looking at HCI solutions, including Scale. StarWind and HPE SimpliVity as we do not the expertise in managing a hypervisor nor the time to manage it.

That's the appropriate short list. Of those, @Scale is the one that is going to offload the most from your plate. Starwind provides HC but you are still managing the hypervisor on your own, separately. It's architecturally all together, but the management console is not.

So some quick numbers to help with comparisons. These are super rough on both sides.

For a two node system from xByte you are looking around $10-$12K if you want to have two nodes. If you forego the second node, which is often the smart thing to do, then it's the $5K-$6K more or less. Don't undersestimate the value in keeping things simple and not having failover. Very, very few companies need failover of any sort. Downtime is typically cheap.

Scale starts with three nodes and their starter node is $7,800 and too small for you. But likely all you need is a drive upgrade. You would be pretty small on the Scale side to meet your storage needs. My guess would be around $9,500 per node. So that's $28,500, I think.

It's way more than double the cost of doing two server nodes on your own directly. But it is also an appliance will full support for the entire stack rather than priced based on you doing your own support. That's really what you are paying for different between the two solutions. Both are fast enough and big enough to meet your technical needs. The question is how much of the "don't want to manage the hypervisor and storage" that you want to do.

The bolded last sentence is what it comes down to.

Find out how much an ITSP would be and do the math.

If it's less than $20k, I'd start with a single server for $6k with backup, and after the ITSP comes in and actually sees and understands your business needs and what data you have that is taking up all that space, they can recommend whether or not it's worth throwing up another node for failover/HA.

A lot to consider here. Thank you for everyone's input. I need to run all these suggestions by a few other people in my office to get a better idea of what is important to stakeholders. I can then ask more specific questions.

People always say that they don't want to manage the hypervisor and storage.... What is there to even manage? I've only used XS and Hyper-V, but every time I've ever set them up, they just run.... There is literally nothing to manage. Occasionally running updates is super simple on XS, an hour a month tops for 2 nodes. He's already planning for enough storage for the next 3 years, not like he's going to be upgrading that constantly, and if he does, just use move everything to the second node... Is there something I'm missing?

How this is done best is decided via the expertise of IT, not stakeholders.

He could be speaking with other members of the IT department.

Maybe, maybe not.

Yes, I am talking about IT. I don't always agree with how decisions are made or what they are based on. Yes, it is usually money but also redundancy/DR are a consideration and who is going to support it.

How this is done best is decided via the expertise of IT, not stakeholders.

He could be speaking with other members of the IT department.

Maybe, maybe not.

Yes, I am talking about IT. I don't always agree with how decisions are made or what they are based on. Yes, it is usually money but also redundancy/DR are a consideration and who is going to support it.

Right, but to Tim's point - every bit of that does and should boil down to money. Does the risk profile show the spend is appropriate, etc.

How this is done best is decided via the expertise of IT, not stakeholders.

Tim is correct and this can't be overstated. Once you run the math, you have the answer. If a stakeholder votes against the math.... that's sabotaging the company. If you have stakeholders doing that, you have bigger problems.

That would help you to determine what solutions are the only reasonable solutions (in terms of financial spend).

If he lacks the info that he needs, then definitely. Speaking to others to determine the components for the math, yes makes total sense. Once you have those numbers and run them, then opinions should end and it's literally all math.